Corhill Corp. v. S. D. Plants, Inc.

• Decision Date: 25 May 1961
• Citation: 176 N.E.2d 37,217 N.Y.S.2d 1,9 N.Y.2d 595
• Parties: , 176 N.E.2d 37 CORHILL CORPORATION, Appellant, v. S. D. PLANTS, INC., Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 1

217 N.Y.S.2d 1

9 N.Y.2d 595, 176 N.E.2d 37

CORHILL CORPORATION, Appellant, v. S. D. PLANTS, INC., Respondent.

Court of Appeals of New York.

May 25, 1961.

Simon H. Rifkind and Peter M. Fishbein, New York City, for appellant.

Lyon Boston, Karl T. Frederick and Carl C. Manderen, New York City, for respondent.

FROESSEL, Judge.

In this action by plaintiff for breaches of warranty and of a subcontract, defendant contractor moved to dismiss plaintiff's amended complaint on the ground of release (Rules of Civil Practice, rule 107). The Appellate Division reversed Special Term's denial of the motion. The question presented on this appeal is whether on the record before us 'facts tending to obviate' the 'objection' have been shown (id., rule 108). Town of North Hempstead v. Harper, 235 App.Div. 708, 255 N.Y.S. 922, affirmed 259 N.Y. 633, 182 N.E. 212; Erbe v. Lincoln Rochester Trust Co., 2 A.D.2d 247, 249, 154 N.Y.S.2d 184, 187, affirmed 3 N.Y.2d 842, 166 N.Y.S.2d 81; Zimmer v. Whiting-Buick, 274 App.Div. 967, 84 N.Y.S.2d 839.

Defendant's claim of release is predicated in part upon a document captioned 'Release of Liens' ¹ executed by plaintiff, but more particularly upon general condition No. 25 of the subcontract providing in relevant part that the 'making and acceptance of the final payment shall constitute a waiver * * * of all claims by the Subcontractor, except those previously made and still unsettled'.

In our opinion, the 'Release of Liens' document served to release liens and claims of liens of plaintiff subcontractor and nothing more. The reference elsewhere in the document to 'claims', upon which defendant relies, means claims by laborers, contractors and materialmen of plaintiff subcontractor with which it is chargeable, and not the claims of plaintiff subcontractor itself against defendant contractor. The document read as a whole and construed in the light of general condition No. 30 ² of the subcontract, pursuant to which it was drawn, tendered and executed, clearly compels this conclusion. See Rentways, Inc., v. O'Neill Milk & Cream Co., 308 N.Y. 342, 347, 126 N.E.2d 271, 273; Empire Prop. Corp. v. Manufacturers Trust Co., 288 N.Y. 242, 248, 43 N.E.2d 25, 27, 28; Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E.2d 386, 391; Matter of Delaware County Elec. Co-op. v. City of New York, 304 N.Y. 196, 201, 106 N.E.2d 605, 606.

We note, moreover, that were we to sustain defendant's interpretation of this document the express provision in condition No. 25 preserving 'previously made' and 'unsettled' claims would be rendered entirely meaningless, and this we may not do. It is a cardinal rule of construction that a court should not 'adopt an interpretation' which will operate to leave a 'provision of a contract * * * without force and effect'. Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 46, 150 N.Y.S.2d 171, 174; Fleischman v. Furgueson, 223 N.Y. 235, 239, 119 N.E. 400, 401.

Turning then to condition No. 25, we think a question of fact is presented as to whether the claims at bar were 'previously made' and 'unsettled' at the time of final payment. The relevant portion of plaintiff's affidavit (by its president, Powers) in opposition to the motion avers in substance that, while the work under the subcontract was being performed prior, of course, to final payment and the claims which are the subject of this action arose, such as delay by defendant, for example, 'conferences were immediately had with the defendant's officers' and plaintiff's 'claims' were made known (emphasis supplied). Specific reference to conferences in September and October of 1957 and the specific complaints respecting said claims made on those occasions are given in the affidavit as examples. Plaintiff maintained in the affidavit that it was advised at those times by defendant to continue with the work and that adjustments would be made upon completion of the contract, but they never were. Final payment was made on January 28, 1958.

Defendant's vice-president, in his reply affidavit below, after noting plaintiff's claims as just outlined averred: 'There were no unsettled contractual claims made by plaintiff at the time of final payment under said subcontract' (emphasis supplied); he had previously made the same assertion in his moving affidavit. Notwithstanding the foregoing, defendant now urges the absence of a factual dispute.

In this connection great stress is placed upon a letter written by plaintiff's then vice-president, one Stille (now deceased), to defendant, dated December 13, 1957. It marked the initiation of a series of correspondence culminating in a letter by defendant dat...